This week’s award of seabed for massive floating wind development off Shetland marked a decisive step forward for the Scottish islands’ ambitions to “replicate oil & gas with green hydrogen”, said the veteran North Sea energy executive coordinating the efforts.
The Crown Estate Scotland on Monday named three projects east of Shetland involving developers Ocean Winds, Mainstream Renewable Power and ESB as winners of the clearing round of its ScotWind leasing process, paving the way for 2.8GW of floating wind that the seabed landlord said has a “common hydrogen focus”.
The award is “fantastic news” and a “prerequisite” for plans under the umbrella of Shetland’s Orion initiative – standing for Opportunity for Renewable Integration with Offshore Networks – that aims to move an economy steeped in the North Sea oil & gas sector into the clean energy era with “industrial scale” renewable hydrogen production, transforming the islands’ own energy sector as well as exporting huge quantities of green fuels, project coordinator Gunther Newcombe told Recharge.
Although not itself an asset owner or investor, Orion plans to act as a “strategic framework” for the vast amount of planning and investment needed in areas such as upgrading ports, power and gas infrastructure, fostering skills, and liaison with other areas of the marine economy such as fisheries.
“We want to replicate oil & gas with green hydrogen export. If you want to produce green hydrogen at scale, you need offshore wind,” said Newcombe, a 40-year veteran of the North Sea hydrocarbons sector and later the UK Oil & Gas Authority who is now leading efforts to put Shetland on the global energy transition map with Orion, a collaborative platform that includes the local Shetland Islands Council, academic and enterprise partners.
The three developers awarded seabed for the latest ScotWind projects have so far released few details of their plans – but Newcombe claimed renewable hydrogen production is the main game in town as a destination for such huge power output in an area where the only link to the mainland, a 600MW subsea line currently under construction, is already fully accounted for.
“The business case is green hydrogen – and whatever is produced from green hydrogen,” he said, adding that the Orion team had spent months in discussions with potential winners of the Shetland ScotWind seabed. It is also talking to interested parties in INTOG – Scotland’s separate pioneering lease round to decarbonise oil & gas assets.
Between ScotWind and INTOG, Newcombe reckons there could be as much as 4GW of floating wind in Shetland’s vicinity. While INTOG is focused on asset decarbonisation, the Orion chief believes it “also has a wider agenda that will play out, I believe, into creating green hydrogen as well”.
Start with onshore wind
With Scotland’s large scale floating wind projects not expected to kick into operation until the latter half of the decade, Newcombe hopes Shetland can start its green hydrogen adventure earlier, aided by the islands’ fast-growing onshore resource, led by the 443MW Viking project that developer SSE claims will be the UK’s best-performing land-based wind farm when it enters service in 2024.
“We’d like to start that process pre-2025 from onshore wind. That will be the start, then the offshore wind is the larger story.”
The construction of Viking is already giving Shetland a taste of life as a major wind power hub.
“We’ve got 103, 4.2MW turbines being delivered from Vestas. The supply chain is already getting its head around onshore wind at scale – and with offshore floating we’re talking an even bigger scale.”
Newcombe is under no illusions over the size of investment needed to transform Shetland into a green hydrogen hub, reckoning upgrading its ports – such as Sullom Voe, home to a vast oil & gas terminal – for offshore wind and other energy transition capabilities could cost £150m ($178m) alone.
Orion’s wider agenda, including carbon capture and storage and how to decarbonise oil & gas operations.
All the strategic partners have got skin in the game.
Newcombe believes the presence of a string of global energy giants on its steering group – the likes of BP, Equinor, SSE, TotalEnergies and Shell – demonstrates the commitment of the industry to help Shetland achieve its vision.
“All the strategic partners have actually got skin in the game to undertake this transformation.
“They are looking at how do you decarbonise offshore using a combination of power from shore, offshore, synthetic fuels, hydrogen – they are all in the conversation.”
As well as turbocharging the North Sea’s energy transition, that can only be good for Shetland's own energy independence and affordability. Newcombe points out that Shetland is harder hit than most by the current energy crisis, given that it has to import most of its supplies and pay a significant premium for doing so.
“It can get pretty cold and dark up here,” he said.